Defining Market Drivers for Apple Inc - Assignment Example

Apple Mobile Manufacturer Introduction Apple Inc. is an American multinational corporation that deals with the manufacture of electronics, computers and its accessories, software development and other online services in the telecommunication industry. However, its main focus is hardware products that include Mac computers, iPad smart phone and tablet computers. They have excelled in this competitive telecommunication industry owing to the fact that the company focuses on quality, efficiency and uniqueness in their products that meet the divergent needs of the consumers in the market. Its target market is well cut-out for high end consumers who go for efficiency and class. Currently, the company is the second-largest corporate organization in the world in terms of revenue after Samsung and is one of the most valuable brands having gained consumer loyalty and trust through good business practice over the years. Yip’s Drivers of Internationalization In order to ascertain the degree of globalization within a particular industry, there are four main drivers that need to be analyzed and these include: market drivers, competitive drivers, government drivers and cost drivers. Market drivers seek to demonstrate customer behaviors in relation to company products in the market domain. Consumers are the major players in the industry as they determine the demand for market commodities and influence the decisions of the manufactures. The global consumers’ needs tend to converge at the same point. Cost drivers attributes to the aspects of competition among industry leaders at a regional or national level. The different dynamics that come into play in the course of operation depending on the region of operation. Government drivers include such factors as favorable tariff rates, common products and services standards and liberalize trade policies. Market drivers The convergence of consumer needs is one of the most important elements in any business venture. The dynamics of these common tastes and preferences may vary by product from one region to another basing on cultural practices, disposable incomes, and the homogeneity of the target population in reference to a particular product. Apple Inc. as an international organization offers the same product but differentiates it to suit the specific needs and preference of the society under operation. There is need for the product to be modified in a very professional way to maintain its brand identity while at the same time blending with the cultures, tastes and preferences of their specific target market in their various markets across the globe. Apple mobile manufacturing company has been keen in redesigning and customizing their electronic devices to suit the specific needs of its current market. This has been achieved by having a diverse labor force in their product manufacturing unit to cater for the diverse consumer needs in their international market. The company largely relies on consumer feedback, market dynamics and trends to standardize their products and services without sacrificing their brand and identity in the global market. The multinational corporation has been categorical in ensuring that the same level of quality is essentially maintained regardless of the country or region of the world in which they are situated; owing to its well-structured global distribution channels. This strategy has been used by Apple to fundamentally increase global customer base while taking advantage of the rising convergence of needs. As consumption patterns increasingly become homogenous, international corporations have been forced to establish a strong global brand to increase their performance on the international front and guarantee their survival. This explains how Apple has been able to retain their position among leading International Corporations in this industry owing to their strategic marketing and effective global branding. However, this strategy has limitations in the sense that consumer needs and preferences tend to be very dynamic and may differ to some extent from one region to another, depicting the difficulty in satisfying the divergent needs collectively without compromising the culture and preference of specific groups of people in the market. Cost drivers The globalization of consumer needs will essentially alter the economies of many industries. Some factors such as cost of production, diversification and the scope of economies of scale have great importance as determinants of global strategies (Federico et al. 2013). The new economies of scale in the global industry has made it had hard for new entrants to get access to the market and establish a competitive business venture. The new structures tend to work as potential barriers, setting the level of market entries a notch higher, hence locking out many aspiring entrants into the market (Markus 2011). In such an environment, real differentiation becomes hard to achieve as each firm works to meet the same consumer needs hence works towards the same direction in reference to the recent trends and technological advancement in the same industry. This is a big limitation to this driver in the course of attaining its business objective. This is the same case scenario with the competitive telecommunication industry that has major players who dictate the trends and price dynamics in the market. Apple Mobile Manufacturing Company and Samsung are currently the most influential international corporations in telecommunication industry and tend to create a barrier to entry at the helm of the industry by other new entrants through economy of scale dynamics. The rivalry between these two industries is on the rise as both firms capitalize on the most recent technological advancement in the market to customize their products and services with an aim of meeting the divergent needs of its consumers on the international platform. Being in the same market, true differentiation becomes harder to achieve; for instance, both companies have adapted similar online applications, computer programs, graphics and operating systems, making it hard to establish distinct differentiation. Competitive drivers The competitor drivers are dependent on the country of origin and its total sales made in import and export volume. Major players in the international market have created a link between their competitive strategies across the various regions of the world. Globalization is also enhanced in the process through creation of interdependence, high levels of trade and competitive diversity which works to increase organization’s performance and preserve their competitive advantage. International firms frequently adjust their operation and underlying management strategies to accelerate the rate of globalization and adapt to the changing needs in the market. The responsive nature of an organization enables it to preserve its competitive advantage as it gains the capacity to detect any changes in the industry and adjust appropriately and in a timely manner in order to maintain its relevance in the market and maintain its consumer base (Freemantle 2013). In the information technology industry, major advancements and developments are common owing to the flexible and dynamic nature of the industry. Apple.inc has managed to maintain its competitive edge by maintaining its brand reputation and having a very responsive and competent labor force to address the emerging issues in the industry. Government drivers-this entails the presence or absence of trade policies and regulatory rules in operation that may either work to promote or regulate business operation in a particular state; hence these drivers directly influence the operation of an organization. The government plays an integral role in establishing a global competitive environment. The politics and economics of the state work to influence the day-to-day business operations (Freemantle 2013). In recent times, most multinational corporations are becoming more intertwined to shaping the competitive business world of today. There is need to define the role of national government and the multinational organization in reference to policies and regulation postulation. Apple mobile company has been keen to capitalize its operations in countries with friendly trading policies so as to maximize on its operations and take advantage of the prevailing governing rules. The various disparities in the trading policies and regulations affect the competitiveness of the various international corporations in the market (Yetton 2013). Johnson’s Culture Web Culture is used to connote the way things are done within the organizational setting. It defines the nature of the organization and distinguishes it from the rest in the industry. Every organization has their own style of doing things, practices and values that they uphold and are associated with; as construed by McKinsey (1999). The culture of an organization essentially affects the success or failure of a project as it directly affects its day-to-day operations. For instance, affecting employees’ morale and commitment, motivation and high staff turnover. In essence, corporate culture tends to have a significant impact at the work environment and in determining the workforce’s output (Stone et al. 2010) Gerry Johnson and Kevan Scholes provide a feasible model aimed at addressing the corporate culture issues referred to as the Culture Web. This model essentially works to provide a platform for examining and changing an organization’s culture. Some of the core elements of the Cultural Web that identifies six interrelated elements that contributes to the school of thought and model structured by Gerry Johnson and Kevan Scholes referred to as the ‘paradigm’ of the work. Through analysis of these elements is what portrays the overall picture of corporate culture place (Zhang, 2013). In the analysis of the telecommunication industry, these elements work to demonstrate aspects of cultural dynamics on the operations of the major stakeholders and key players (including Apple Inc. and Samsung). This model seeks to highlight concepts that are working and those that are not and need to be adjusted. Some of these elements include: Stories-these include past records that have been documented in the company’s history both inside and outside the company domain. It seeks to express what the organization values and perceives as the behavior they advocate for. Rituals and Routines-this alludes to the behavior that characterizes the labor force of a particular organization. It seeks to identify an organization’s acceptable behaviors. This is what is upheld by both the employees and the management and with time it becomes incorporated into their corporate culture. Symbols-these are signs that represent the image and brand of the company. Some of the symbols that depicts an organization’s image include the logo, dress code and work tags among others. It also includes specific jargons and image associated to the organization. Apple.inc has been associated with a high class brand image that is client-based. Organizational structure-this include the unwritten laws that characterize the operations of an organization. It indicates whose contribution has the most influence to the organization; Apple also has a well-defined hierarchy of power channel. Control systems-the overall manner in which an organization undertakes its operations. These include control programs such as financial systems, quality systems and remuneration. It demonstrates how the various systems operate, and is analyzed and distributed within the organization. Apple.inc has an out and out compensation plan for its labor force that works to motivate the labor force and inspire them towards meeting the objectives of the organization in question. Porter’s Diamond It seeks to describe how an organization works to maintain a competitive advantage in a particular industry. There are three phases that characterize this generic strategy. They include: lower costs, differentiation or focus. An organization adopts one of the competitive advantages and differentiates itself along the dimensions valued by the end-users (Yetton 2013). Porter asserts that the target is either cost leadership, differentiation or focus. These three facets as construed in Porter’s Diamond can be applied to any organization in the corporate sector. Porter claimed that an organization ought to choose from any of the facets that best suits its corporate needs at the present moment and in future. Porter’ss generic strategies seek to offer detailed interaction between cost minimization, product differentiation and market strategies (Porter 1990). The cost leadership strategy entails a company winning consumers in the market domain by endorsing a cost-conscious strategy. This strategy has been used by many companies in the course of breaking through a new market economy. It has also been widely used by organizations in competitive economies to accrue competitive advantage over other potential competitors in the business corporate world. To succeed at offering the lowest price, the organization must be well-established, with proper structures and systems in place, which can sustain its operation while working under small profit margins. For this reason, organizations such as Apple that have been in operation for a long time and has gained consumer loyalty can reduce prices on some of their products and services that are not competitive enough in the market to appeal to consumers and capture wide segment. The first objective of the corporate organization is to attain a high asset turnover in the information technology sector. It involves the production of high volumes of electronic gadgets, ensuring that the fixed cost is spread over an expansive number of product units at a lower commodity cost per unit. This means that the firms utilize economies of scale to capitalize on their production (Gamble et al., 2010, p. 211). Differentiation Strategy The Differentiation strategy is mostly used as a strategic approach in cases where the target market segment is not price-sensitive. It is used in cases where the customers have specific needs that have probably not been sufficiently met by industries in the market and so the firm that has unique resources that can meet these specific needs gains confidence of the customers in the market domain and hence acquire a competitive advantage regardless of the prices being offered for the commodities. The establishment of unique product attributes and a brand that is hard to copy gives the original company the mandate to take full charge and control of the market domain. In this case, the price of other related products cannot deter the company from making huge sales owing to the satisfaction that the products give to the consumers at any given time. This is the strategy that has over the years worked for Apple Corporation. Having a unique brand such as the Mac computers is associated with class and its high cost and quality production satisfy the need for the high class consumers whose focus is not on price but rather on brand name and the maintenance of their social class. However this may not work in all economies as there are a number of high end consumers who would like to have value for their money and hence may tend to overlook on brand if they think that the product have been over priced yet they can receive the same kind of services from other equally quality brands in the market. And hence price is may tend to affect aspects of differentiation among a fraction of the population. Focus Focus is not fundamentally a separate strategy for established firms in small market conditions but rather firms that believe that applying the differentiation strategy avoids competition with other potential competitors in the market domain. In adopting a narrow focus the company essentially focuses on a few target markets; a process referred to as segmentation strategy or better still niche strategy. The firm typically looks to gain a competitive advantage through product innovation as the most effective way marketing strategy rather than efficiency. Conclusion It is important to note that different companies use different business strategies and models to realize a competitive edge and sustainability in the corporate market domain based on their respective nature of operation and its target market. In essence, the managers and top executive officials need to identify their business niche and target market to ascertain the most strategic model that can espouse the achievement of their ultimate objectives and goals. From the porter’s diamond model, we get to understand that the most important aspect of business is to meet the needs of its clientele and ultimately establish a brand name and customer loyalty. This is the best approach that any business that needs to succeed and remain relevant to the market domain needs to undertake. Consumer taste and preference is a very important tenet that every business organization should strive to achieve throughout their course of operation. Apple mobile manufacturers were able to identify specific needs in the telecommunication market that had not been met and hence customized their electronics to meet the divergent needs of the high-end users hence the reason for its excellence and relevance at the helm of the industry to date. 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